The Truth About Reselling on Amazon FBA in 2024

One of the most popular ways that people have been making absurd amounts of money is through reselling on Amazon FBA (Fulfilled by Amazon).

This is just finding an item at a lower price in one place and then selling it for a higher price online.

Seems easy enough, right?

Well, that’s what I thought too until I discovered what was really happening to most sellers behind the scenes…

How I Started Reselling

Like a lot of you I don’t want to spend my entire life working a 9-5 job.

In my search to find ways to create my own income, I kept coming across articles and YouTube videos about people buying cheap products that they’d find in stores.

Then they would sell them online on places like Amazon for outrageous profits.

Immediately I saw this as the way out from my desk job and doing work that I wasn’t really passionate about.

So, I signed up and created an Amazon seller account then I mimicked what I saw so many successful sellers do on YouTube.

I started using my free time over evenings and weekends to search through stores to find discounted items and I was sure I would find loads of products that I could make money on.

And that’s when I realized the first hidden truth as to why many resellers fail.

5 Problems With Reselling on Amazon

1. Finding Profitable Items

Many of the stores that I visited I would scan entire aisles of products.

In a lot of cases there was not enough profit to be made in the items I would find in the store versus what they were selling for on Amazon.

Especially considering the fees you pay for using the Amazon sales platform.  

I will say depending on where you live and what stores are in your area you might have more or less success than other resellers.

But in my case, this was a major issue.

This is just one of the struggles with reselling on Amazon FBA.

2. Ungating Requirements on Amazon

The next reason I found that most sellers fail in this business is brand restrictions.

Because Amazon wants to protect their reputation, they don’t allow most 3^rd party sellers to sell popular brands to prevent counterfeit items being sent to buyers.

So even if you come across a good deal on a pair of Nike shoes, you won’t be able to make any money because Amazon would restrict you from selling them on their platform.

This can be one of the most frustrating things that a reseller can experience.

Now there are ways around these restrictions, and here is an amazing resource that can help you!

3. Amazon FBA Seller Statistics & Buy Box

Another underrated reason that people fail reselling on Amazon FBA is competition.

On one hand, it’s unbelievable to see that Amazon Marketplace had over 200 million active shoppers as of 2022.

A report from Amazon shows that the site alone sells about $1.5 million worth of products every single day.

That’s 66,000 sales per hour and 19 orders every second.

You would think with those numbers you can accidentally get rich selling on Amazon.

But what nobody talks about is that Amazon has the largest seller platform in the world and there are nearly 10 million other private sellers alongside you.

Let me explain how this works.

Amazon wants to keep their customers happy so they will usually offer the lowest price to their shoppers.

As a seller, if you list an item for sale and a customer orders it, Amazon will usually award that sale to the seller with the lowest price.

Say you have an item but you’re competing against 100 other sellers trying to sell that exact same item.

Because Amazon awards that sale to the person with the lowest price it starts a

reverse bidding war.

So if you happen to find a deal on an item where you can make decent profit that can quickly turn into you earning next to nothing or in some cases even losing money.

Take this Mr. Potato Head Toy for an example:

I found this on a clearance rack for $10 and it’s selling on Amazon for close to $40.

Now that’s amazing, from this one item I would make almost $30 in profit before fees.

But just for fun, I checked what this item was selling for 6 months ago, and the same toy was selling for nearly $75.

And this massive price drop is all due to competition.

4. Amazon FBA Reseller Tools

Another major reason that sellers don’t succeed reselling on Amazon FBA is cost.

It’s easy to find people talking about how much money they’ve made through reselling, but what a lot of people neglect to mention is all the monthly fees that come out of their pocket.

There are a ton of amazing tools and services out there that make reselling easier, that a lot of resellers use.

But they don’t come without a cost, and this is where I see most new sellers set themselves up for failure.

Common Amazon Reseller Tools:

• Amazon Marketplace Professional Account – $40
• InventoryLab Sales Forecasting App – $70
• Repricer.com Automated App – $50
• Your Selling Guide (Reseller Group) – $90
• The Funnel Guru Ungating Service – $250

These expenses can completely eat away from any money that can be made.

5. Actual Wages for Amazon FBA Seller’s

The absolute biggest reason that most resellers fail in this business is they don’t place a value on their time as it relates to an hourly wage.

Check out this example:

You spend 40 hours in one month finding products listing them and selling them on Amazon.

Before any fees you stand to make a $1,000 profit from those sales.

Common Amazon Seller Fees:

• Cost of goods $100
• Amazon Marketplace – $40 mo.
• Reseller Group Membership – $90 mo.
• Sales Forecasting App – $70 mo.
• Automated Repricer – $50 mo.
• Amazon Ungating Service – $250 (one-time fee).

After all these expenses that leaves you with $400 profit for the month.

Now divide that $400 profit by the 40 hours we worked that month and that breaks down to $10 per hour.

That doesn’t account for things like gas, supplies, or competition lowering the price of the items.

So realistically your hourly rate could be a lot less than that which isn’t too far from minimum wage.

Out of curiosity, how much do you value your time? If you were to run your own business or have a side hustle, how much would you want to make per hour?

How to be Successful Reselling on Amazon FBA

On a more positive note, despite all of this I still think that reselling is a great way to make money if you go about it the right way.

The best advice I can give you about any business or side hustle is to do the research and take time to learn the process before you dive in.

In any business, not just reselling if you’re able to spend less time actively working, it can allow you to generate income more passively and enjoy more of your time.

I managed to make over $13,000 in product sales last year without really putting any time into reselling.

One way I’ve been able to stay profitable is by decreasing the amount of time that it takes me to find cheap products.

Personally, I rarely go into a physical store any longer to find deals, but if I do, I only visit a few select stores where I’ve found success in the past.

This allows me to be in and out of a store in minutes as opposed to spending hours scanning entire aisles because I know what to look for.

Free Tools for Reseller’s

Nowadays I find most of my inventory online, or should I say the inventory finds me!

I use a number of apps that send me notifications right to my phone anytime that an item gets marked down for sale.

The best thing about it is I don’t pay anything for these apps to send me deals.

It usually takes me less than two minutes to see if I can make money from an item, and if so, I order it right there for my phone!

Like this body fragrance that I was notified of that got marked down from $99 to $39.60.

Sure enough, I can sell it right now on Amazon for about $100.

If you want to learn about how to find deals online leave me a comment and let me know.

Secret Cash Back App

I’ll admit that I do have a secret though.

The main thing that helps make money is a free cash back app called Rakuten and it essentially pays you to shop.

Last year Rakuten paid me over $3,500 in cash back and incentives for doing absolutely nothing.

In my opinion, every person on the planet, especially resellers, should be using this service because it’s literally free money.

If you sign up using this link, they could give you a $30 sign up bonus!

But if you’d like to start earning hundreds or even thousands of dollars with Rakuten like I did, go ahead and click into this video next and I’ll show you how to do it.

Conclusion

The truth about reselling on Amazon FBA in 2024 is a mix of challenges and opportunities.

While making substantial profits is real, it’s crucial to understand the hurdles that many resellers, including myself, have faced.

From the struggle finding profitable items to navigating brand restrictions, the journey is far from a walk in the park.

But despite the challenges, reselling can still be a great way to make money if approached the right way.

The key lies in thorough research and learning the process.

For those considering or currently reselling on Amazon FBA, feel free to check out more helpful information in our resource center.

Frequently Asked Questions (FAQs)

Q1: Is reselling on Amazon FBA actually profitable?

A1: Yes, reselling on Amazon FBA can be profitable, but it comes with its set of challenges. Success often depends on various factors such as product selection, and competition.

Q2: What are the common challenges when reselling on Amazon FBA?

A2: Resellers encounter challenges such as difficulty finding truly profitable items, brand restrictions, and intense competition.

Q3: How can I find profitable items to sell on Amazon FBA?

A3: Utilize online tools and apps to streamline the product-finding process. Consider focusing on specific stores or exploring online options to save time and increase efficiency.

Q4: How do brand restrictions affect reselling on Amazon FBA?

A4: Brand restrictions can limit your ability to sell popular brands, hindering potential profits.

Q5: Is there a lot of competition on Amazon FBA?

A5: Yes, competition is significant. With millions of sellers on the platform, securing the Buy Box and maintaining profits can be challenging.

Q6: Are the monthly fees for reseller tools worth it?

A6: While reseller tools can enhance efficiency, it’s important to consider the costs. Monthly fees for tools like InventoryLab and others can add up.

Q7: Can I be successful as a reseller without spending too much time?

A7: Yes, by optimizing your approach, utilizing online tools, and minimizing time spent actively searching for products, you can make reselling a more passive income stream.

Q8: How does Rakuten help when reselling on Amazon FBA?

A8: Rakuten, a cash back app, can significantly contribute to profitability. It offers cash backs and incentives for online purchases, adding an extra layer of income.

Q9: Any advice for someone considering reselling on Amazon FBA?

A9: Research thoroughly, stay informed about market trends, adapt to changes, and value your time wisely.